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Policy Paper

Across State Lines Explained

Why Selling Health Insurance Across State Lines is Not the Answer
  • and John Bertko, Actuarial Consultant, New America Foundation
October 8, 2008 |

As we enter the home stretch of a long presidential campaign, the good news is that both major candidates recognize that our health care system, especially the insurance marketplace, does not work well. The concept of selling health insurance across state lines has been included in health care proposals put forth by several Members of Congress and most recently in the campaign plan of Republican presidential nominee, Senator John McCain.

Allowing insurers to sell insurance across state lines would not work as advertised. While it may help the young and healthy, it will have a devastating impact on the insurance market for everyone else (and none of us will be young and healthy forever).

  • premiums would rise for many people,
  • benefits would be less-generous,
  • more Americans would likely become uninsured over time.

This policy approach fails to provide the incentives necessary to transition insurers to a 21st Century business model that values care coordination and high value care over underwriting and marketing. Without substantial additional reforms, the proposal to sell insurance across state lines will not work for most Americans.

For the complete policy paper, please click here. For a brief summary of the findings of the paper, please click here.

A proposal to sell health insurance across state lines reduces aggregate costs by reducing the scope of benefits, not by increasing the value of care.

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